Download 2. Management as a process of making choice. Human needs

2. Management as a process of making choice.
Human needs – state of impregnation, absence, unfulfilled. People feels
many needs and aims to maximal satisfaction them, which is equivalent with
lay-out definite aim of operation it can favor different kind of needs:
physiological, safety, social contact, recognize, self-realization.
Like as need, resources satisfy human needs have different character. It
can divide them on: material goods (economic and free) and material and
immaterial services.
Free goods – are directly supply by nature (e.g. water), available without
taking costs.
Economic goods – goods made by human in limitation quantity.
Goods can divide on:
Consummation goods – products were being effect of economic activity
of human and can being satisfy needs in immediate mean.
Production goods – economic goods using to make other goods, we are
calling then production elements.
Production elements (productive) – they contain material and
immaterial resources of resources using in produce process in aim of satisfy
human needs. Production elements are complementary (one another complete)
and in certain field are substitutive (replacing them self and their feature in
market economy is it, that using each other get income to owner. Immaterial
element of production is job, out material elements are land (natural resources)
and capital.
Work (human resources) – process of complicated physical-intellectual
activity of human which aim is transformation natural resources for goods which
satisfy human needs one from production elements (next to land capital).
Capital – contains to manage economic activity need buildings machines
gadgets mean transport instruments resources and reserve of products (which
use can define as physic capital) and different type financial mean e.g. financial
and securities, such as actions or obligations.
Land (natural resources) – one of kind of productive elements which
contains every natural gifts: natural resources, soil, forests, rivers, oceans.
Production elements indispensable in every production process they can’t
everything produce. It should complete and properly organization from here to
presented set of elements of production in added else forth element –
technology.
Technology – show quantity and necessary resources to product
production; show also proportions, which this resources would be join them self.
Production – aware and suitable process making products and services in
aim of satisfaction of human needs, defend on take costs in aim to achieve
Scarcity - limited availability given good or services.
Scarcity of stock causes necessity of taking by economy (single person,
enterprises, institutions) of continuous choice having always alternative
character. The essence of choice is taking the most arbitrated decisions
(optimal decision). Aspiration to obtainment optimal solutions is a rational
operation. It is possible to differ two kinds of rational operations: rational real
and methodological
Rational real - it is identified with forceful operation, such leads to
maximization benefits.
Rational methodological - it means that operation is rational from the point of
view of knowledge making a decision. Decision is rational if achievement of
maximum benefit enables given possible to achievement at knowledge making a
decision level
General indicators at making choices the most Advantageous Solutions supplies
rational economic principle.
Principle of rational economic It accepts in literature name so calledrule minmax, because it can be Interpreted as :
 Rule of biggest effect at data edition
 Rule of smallest edition for achievement given effect
Every choice accompany two effects - Benefits and cost. On taking production
deciding or consumption product we expect to achieve product benefits from
perform choice.
Every benefit from take decision economic accompany alternative cost.
Alternative cost is a cost of lost benefits diffrent applies owned stocks or it
means resignation from other purposes, we could assign achievement on which
owned stocks.
Marketing process - is based specialization and work devizion
Work devizion - the way on the organization of production process in
saciety based on the devision into groups making certain goods (social work
devision) and groups which repeat centain activities to make the goods
(technical work devision).
Specialization of work - results partly from inborn skills of workers.
However it's the effect of using more sophisticated production methods and
needs more advanced qualification. Managing conists of 3 besic activites
production: devision, consumption.
Optimal decion rule - every enterprise subject tring to maximalize the netto
profit of it's economy act. should increase it or decreas till marginal profits and
marginal costs equal.
1). Marginal profit > marginal costs - development enterprise
2). Marginal profit < marginal costs - limited of the enterprise development
3). Marginal profit = marginal costs - optimal enterprise development
PRODUCTION POSSIBILITIES CURVE
The devision which explains the problem of economical choise and the cost
connected with in production possibilities curve (Transformation curve,
production possibilitis limit), which is the graffical picture of various quatity
goods combination that can be produced when all the resorces are fally and
effectivly used. It saparates the producent accessible combinations from
unaccessible ones at the level of technical knowledge and own resours. The
production of number certcutin goods depends on quantity production of the
ather.
Marginal transormational rate - editional of one product which maybe
produced as a result of decreasing the number a other product by one point.
Effectivnes acording to Pareto - it consernes the derision of goods in society.
Equality shold be separated from effectivnes. According to Pareto allocation is
effective when one group of consumer with the some tastes and production and
technical resources can't move to another alocation which would make the state
of the other some people better without the risk to worsen the state of other
people.